Prediction Markets + Market Predictions = Collective Forecasting That Pays Off
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Jason Ruspini on OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]
Paul Hewitt on When the ObamaCare event derivative reaches 80%, I will officially declare America as a socialist country —just like France and Sweden.
Chris F. Masse on We interrupt this report to bring you some Jazz.Chris F. Masse on OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]Chris F. Masse on “InTrade should address this incident and suspend the account of whoever did this.”
Niall O'Connor on We interrupt this report to bring you some Jazz.Niall O'Connor on OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]Niall O'Connor on “InTrade should address this incident and suspend the account of whoever did this.”
Max Keiser on OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]Jason Ruspini on OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]
Chris, are you jumping on the prediction market bandwagon (at long last)? I didn’t think so, but I’m curious as to why you would parrot such a naive perspective on prediction markets.
Prediction markets are not “excellent” ways to answer “any number” of questions. Their prediction range is much more limited than the author states. Furthermore, using an “idea pageant” that was “accurate” to support the claim that prediction markets are an excellent way to forecast the future is quite a stretch.
The problem with the example cited is that it is not a true prediction market. Yes, it uses the same mechanism, but it is not a prediction market. A PM attempts to predict an independently generated or occurring outcome. In this case, the market, itself, generated the outcome or someone decided which of the market selections was to receive “faux” venture capital support. Sounds a lot like the Olympic site selection PMs, which were completely wrong.
I suspect that most of the EPM adoption cited by McKinsey (8%!) involves similar, “idea pageant” types of markets. I agree that these markets are a form, and a useful one at that, of collective intelligence, but they are not prediction markets and should not be used as proof that PMs work.
Should we be expecting a Midas Oracle Conference on Prediction Markets in the near future? Of course I’m joking!
Paul,
I just linked to that story.
Thanks for the analysis.
I was just kidding!
Cool.
Paul,
Take a look at this take:
http://blog.crowdcast.com/?p=111
Here’s an updated post on this topic on my blog:
http://torontopm.wordpress.com/2009/11/24/idea-pageants-prediction-markets/
It seems to me that the hype surrounding prediction markets is getting worse. Now there are numerous blogs all quoting the Chicago conference session about this idea pageant. All of the blogs are calling this the second coming of PMs (well, almost).
Corporate decision-makers must continue to be very wary of these types of claims. Academics need to spend more time researching PMs than hyping them.
I’ll have more to say soon.
Paul